About 3.5 million people—up to 2.4% of the total workforce—quit their jobs each month, which is the highest rate in 17 years. Economists at Indeed calculate there are now just 0.91 unemployed workers for each available job.
What’s an employer to do?
Salary is the top reason employees quit, and it’s no wonder: Last June, average hourly earnings rose only 2.7% compared with a year earlier. That number is well below the roughly 4% annual gains that are typical of a healthy economy. To retain employees, take an honest look at your salary structures.
Are your wages in line with the economy or are you just being stingy?
When employees switch jobs for a salary increase, they often come out 10-15% ahead. That’s a tough margin to beat. Plus, counteroffers have a less than 10% chance of paying off. A better strategy is to stay on top of salary increases and bonuses over time to keep employees feeling valued.
But there’s another side to the coin. While salary is blamed for poor employee retention, it’s not necessarily the main underlying factor. Among professionals who cited a higher salary as the reason they left their company, 33% admit they were simply bored and needed a new challenge, and 24% felt their previous employer’s work culture didn’t fit with their values. A bump in salary is simply an added perk.
To combat this with valued employees, find ways to listen and respond to their concerns and, if they’re feeling stagnated, consider moving them horizontally to a different position if a vertical move isn’t possible. For these and other tips, read this advice from HR Dive.
Between salary and work culture, then, lies the key to improved employee retention. Do you have the right combination for success? The answer can depend on several factors and may be unique to each job position within your company. Talk to a professional recruiter for ideas on how to create a recipe for success.